The Bitfinex Launches New Crypto Custody Service. This has raised questions about how the company will survive the storm that it has faced so far. The good news is that the company has responded by offering an opportunity for traders to be insured against losses from the hack. The thing is that this does not provide a solution to all the issues.
If you want to understand the nature of the problem you have to start by answering a particular question. Will the security services to be effective in providing a complete solution?
The answer to this question is ‘no’. Because the people who will provide the security service are the same people who are responsible for the hacks that are occurring now. How could the same people provide a solution that will not solve the problem?
In order to solve the problem of security services, we need to consider three separate areas. The first area is the question of how much confidence do we have in the people who are responsible for providing the services. Because of the available information, the answers are quite negative.
The second area is the issue of the money that has been stolen. Because of the sheer size of the loss, the affected customers will need a number of different services. This is a huge financial problem and the solution cannot come from one place.
The third area is the question of how effective the security services will be. The solutions that are being offered at present will only be able to provide a partial solution. In order to resolve the problem, we need to look at the third area, i.e.
The answer to the problem can be found in another question: Why is the company selling the products? If the purpose of the service is to cover the losses and the second question is answered as above, then the answer should be to offer a solution that will cover the losses of the traders.
The use of the word ‘sold’ in the Bitfinex official response to questions on the hack does not allow us to interpret the direction that the company is heading. We need to find out more about what is going on at Bitfinex.
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